Valuing Water Quality and Quantity Trade-offs from Irrigation in the San Salvador Basin, Uruguay – An Integrated Approach

Date

Time

12:30pm - 1:30pm AEST

Venue

via Zoom

Speakers

Akash Gokhale
Akash Gokhale is a Science graduate and double honours graduate (Animal Sciences 2024 & Economics 2025) from the University of Sydney. He joined GHD, the global professional services firm, in their Agriculture team this year as a Graduate Economist. In 2024 he completed a cost benefit analysis of the use of artificial insemination in commercial Merino sheep flocks for his Honours project in Animal Reproduction. In 2025 he completed an honours project in water valuation, the topic of our seminar.  

Description

Valuing Water Quality and Quantity Trade-offs from Irrigation in the San Salvador Basin,
Uruguay – An Integrated Approach

Greater interannual rainfall variability due to climate change has caused previously rainfed agricultural land to become partially dependent on supplemental irrigation. 
In this study we evaluate ex-ante the trade-offs between economic benefits of supplemental irrigation and its environmental costs for the case study of San Salvador Basin in Uruguay. We use biophysical and production data consisting of inputs (including irrigation water), weather conditions, desirable output (crop revenue), and undesirable outputs (Nitrate and Phosphorus runoff) simulated through the Soil and Water Assessment Tool (SWAT) calibrated for this basin. The SWAT model simulates individual Hydrological Response Units (HRUs) through multiple scenarios comprising three supplemental irrigation levels and three levels of fertiliser application intensity, and a baseline scenario of just rainfed agriculture with currently practiced fertiliser rates. 
We estimate shadow prices for undesirable outputs and for irrigation water and derive inefficiency measures for each HRU-scenario combination using output-oriented and input-oriented quadratic directional distance functions. The results derived using MATLAB show substantial variation in shadow prices across HRU-scenario combinations suggesting a targeted policy approach might be beneficial. The findings suggest that some supplemental irrigation development in the basin would be economically beneficial, even after explicitly considering the environmental costs of such development. This analysis showcases how methods of productivity and efficiency analysis can be successfully integrated with a biophysical model to derive indicators that are directly useful for policy implementation. These findings are broadly relevant, and this approach can be implemented in a straightforward way to case-studies in Australia and elsewhere. 
Cost is FREE for members and non-members

Register for this event